GTSO: New Chinese Rare Earth Production Quotas Could Lead to Shortages

World’s Leading Producer Caps Rare Earth Production Well Short of
Demand

April 26, 2011 09:00 AM Eastern Daylight Time

SAN JOSE, Calif.--(BUSINESS WIRE)--China’s issuance of new mandatory production quotas for rare earth ore
this week adds credence to the claim by Green Technology Solutions Inc.
(OTCQB:GTSO) and other experts that the world’s top producer of rare
elements can no longer keep pace with global demand for the critical
materials.

The Xinhua News Agency reported Monday that China’s Ministry of Industry
and Information Technology (MIIT) announced new mandatory production
quotas for several rare metals conceived as part of the Communist
government’s plans to implement new protective mining policies. The new
annual production quota for rare earth ore is set at 184,200 tons:
93,800 tons of rare earth oxide and 90,400 tons of rare earth oxide
smelting. The new quotas bear little increase over last year’s totals
despite soaring prices and demand for rare earths worldwide. The
ministry also reiterated that China will not grant any new licenses for
prospecting and mining rare earth ores before June 30, 2012.

The new production quota is but the latest in a series of moves by China
in recent months to limit its rare earth exports. Currently, China
accounts for more than 95 percent of global rare earth production.
Environmental concerns and shifting economic strategy, however, led the
emerging Asian superpower to cut its rare element production by 35
percent in the first half of 2011. This cutback sent rare earths prices
skyrocketing and exposed the U.S.’s dependence on China for its rare
earth supply.

Rare earths are critical components in the manufacture of high-tech
green energy technology, including photovoltaic solar panels, wind
turbine generators and electric car batteries. The rare metals are also
essential to the production of advanced smart weapons and defense
systems. Due to the elements’ importance in the race to create the
energy infrastructure and weapons systems of the future, many U.S.
lawmakers support the efforts of GTSO and others to develop new sources
of rare earths outside of China. Earlier this month, Reps. Hank Johnson
(D-Ga.) and Edward J. Markey (D-Mass.) introduced a bill that would
direct the U.S. Geological Survey to conduct a three-year international
assessment of the availability and production of rare earth elements.
The Resource Assessment of Rare Earths (RARE) Act would analyze known
mineral reserves as well as investigate potential undiscovered deposits
outside China. Another bill, the Rare Earths Supply-Chain Technology and
Resources Transformation Act of 2011 (RESTART Act), introduced by Rep.
Mike Coffman (R-CO) seeks to restore domestic production of rare earth
metals.

GTSO is working diligently to help eliminate the possibility of
worldwide rare earth supply shortages by developing new rare earth mines
in the Central Asian nation of Mongolia. The company is currently in the
process of securing the mining rights to four mineral-rich properties
inside the former Soviet state. In February, the company formed a joint
venture with Rare Earth Exporters of Mongolia (REE) to develop new
sources of rare earth elements outside of China. After the joint
venture’s agents signed letters of intent to develop the four mining
sites in Mongolia, GTSO announced plans to acquire REE as a wholly owned
subsidiary, potentially positioning itself as the sole rights holder to
the new properties.

By developing new sources of rare earths inside Mongolia, China’s
neighbor to the north, GTSO aims to help ensure an abundant and
affordable stream of the critical materials to the U.S. and its allies.
For more information on GTSO’s plans to mine and transport Mongolian
rare earth ore, please visit http://www.rareearthexporters.com.

Green Technology Solutions, Inc. (GTSO) is an OTCQB publicly traded
company. OTCQB is the middle tier of the OTC market. OTCQB companies
report to the SEC or a U.S. banking regulator, making it easy for
investors to identify companies that are current in their reporting
obligations. GTSO acquires, develops and implements the newest clean
mining technology to enable our partner clients to expand operations
throughout the world. Environmental restrictions represent the largest
restriction to mining industry growth and operations. GTSO focuses on
overcoming these environmental restrictions with brilliant cutting-edge
clean mining technology.

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